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Alokparna Basu Monga and Liwu Hsu

Abstract

Understanding consumers’ ways of thinking can help identify strategies to limit brand damage and elicit more favorable reactions from disapproving consumers. Analytic thinkers’ beliefs about a brand are diluted when they see negative information; those of holistic thinkers remain unaffected. While both analytic and holistic thinkers blame the brand equally for quality and manufacturing problems, holistic thinkers are more likely to blame contextual factors outside of the brand than analytic thinkers. This ability of holistic thinkers to focus on the outside context is the reason why their brand beliefs are not diluted.

State-of-the-art crisis management should be proactive vis-à-vis potentially negative events. Crisis communications that highlight contextual factors as triggers of negative incidents offer a powerful mechanism to restrict brand damage. Additionally, elaborational messages that clarify the nature of the brand extension can curb negative thoughts from analytic consumers and boost their responses.

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Hammed A. Adefeso

Abstract

This study examined the influence of government corporate tax policy on the performance of 54 randomly selected listed companies that cut across 17 categories of non-financial in Nigeria over a period of 1990-2002. Using Generalised Method of Moment (GMM) and contrary to the expectation, the study found positive1 relationship between corporate tax policy and the output performance of quoted manufacturing firms in Nigeria. This may be an indication that government revenue from corporate tax was judiciously expended on productive government expenditure most especially in Lagos State as virtually all the selected manufacturing firms have their main base in Lagos State. The study therefore recommended that Federal Government should either minimize or totally remove tax incentives, tax waivers and tax holidays to some manufacturing firms in Nigeria.

Open access

The Frontlines of Brand Risk

GfK MIR Interview with Patrick Marrinan, Managing Principal of Marketing Scenario Analytica, New York City, USA

Susan Fournier and Shuba Srinivasan

Abstract

Whether it be the NFL, Dove, Wells Fargo, VW or countless others–managers need only open a daily newspaper to see how things can go terribly wrong for brands. Decline can be fast and the landing hard. In a contemporary marketplace where ideologies reign and social media guarantees the spread of (mis)information at light speed, a lot of what we think we know about brand marketing needs to be rethought through a risk-management lens. “For me, brand risk is any event, action or condition with the potential to damage a brand’s value, thereby making revenue generation and a company’s market value less than it should or could have been,” Patrick Marrinan, Managing Principal of Marketing Scenario Analytica, states. In his talk with Susan Fournier and Shuba Srinivasan, Patrick illustrates the many facets of a risk that has only begun to be recognized as a serious threat to carefully cultivated brand assets. Here we share what to watch out for and what brands can do to protect against risk.

Open access

Susan Fournier and Shuba Srinivasan

Open access

Wei-Bin Zhang

Abstract

This paper studies dynamic interdependence between economic growth, tourism, and inequalities in income and wealth in a small open economy. We build the dynamic model in an integrated Walrasian-general equilibrium and neoclassical-growth theory for a small open economy with multiple sectors and heterogeneous households in a perfectly competitive economy. The economy consists of one service sector which supplies non-traded services and one industrial sector which produces traded goods. We treat wealth accumulation and land distribution between housing and supply of services as endogenous variables. We show that the motion of the economy with J types of households is given by J nonlinear differential equations. We simulate the motion of the system with three groups of households. We also conduct comparative dynamic analysis with regards to the rate of interest, the price elasticity of tourism, the global economic condition, and the rich class’ human capital, and the rich class’ propensity to consume housing.

Open access

Charlotte Mason and Kaushik Jayaram

Abstract

To minimize the potential loss of market share and profits, it is important to understand factors that drive cannibalization. Key brand variables for cannibalization risk concern how the new product compares in price and quality to existing products. Other relevant variables are the category, the type of product and a company’s distribution system. Also, whether a new product will coexist with or replace the existing product needs to be considered.

Estimating cannibalization risk should assess possible effects on company operations.

The positioning of new products needs to be planned and communicated carefully. Too many similar options may confuse the consumer. Brand and category factors as well as the consumption context can help managers mitigate the extent of cannibalization. Profit impact is more relevant than changes in sales figures. A lower-margin product cannibalizing a higher-margin product eats away at profits, but a higher-margin product cannibalizing a lower-margin one is potentially worth the cannibalization risk.

Open access

Tin Horvatinović and Silvije Orsag

Abstract

In this paper we first present some developed theories of financing that firms might accord with in their development stages. The framework, assumptions and predictions of the capital structure of firms in each theory is shown. Afterwards, crowdfunding, as a fairly new source of financing that is increasing significance, is described and is differentiated on the basis of the type of return on investment for the outside investors. In recent literature there have been models that introduce crowdfunding in the framework of financing firms through their life cycle stages. We point the difficulty of encompassing crowdfunding in the mentioned models because of characteristics that are unique to it from the perspective of the investor and the firm. While it is not surprising that crowdfunding is used in development stages, these characteristics make it difficult to construct a model of financing firms that has traditional means of financing and crowdfunding.

Open access

Tomislav Klarin

Abstract

The concept of sustainable development has undergone various developmental phases since its introduction. The historical development of the concept saw participation of various organizations and institutions, which nowadays work intensely on the implementation of its principles and objectives. The concept has experienced different critiques and interpretations over the time while being accepted in different areas of human activity, and the definition of sustainable development has become one of the most cited definitions in the literature. In its development, the concept has been adapting to the contemporary requirements of a complex global environment, but the underlying principles and goals, as well as the problems of their implementation, remained almost unchanged. Still, some goals have been updated, and the new goals were set. These goals are united in the framework of the Millennium Development Goals 2015 which outline the challenges that humanity has to fight not only to achieve sustainable development but to survive on Earth as well.

Open access

Susan Fournier and Shuba Srinivasan

Abstract

In an increasingly risky socioeconomic environment, management needs to proactively consider brand-related risks. To understand brands as tools for risk management, they need to understand four types of brand risk: brand reputation risk, brand dilution risk, brand cannibalization risk and brand stretch risk.

Risk management is not a natural act for brand managers trained in astute execution of the 4 Ps, and contemporary market factors make this more challenging still. With an increasingly polarized society, it is almost impossible for brands to remain untouched by ideologies. In addition, the growth in digital advertising gives brand managers less control over advertising placement and context, and the mandate to keep growing adds executional risk.

The more exposed a brand is to brand risk, the more attention this topic will need in the boardroom. To shift a company’s marketing philosophy toward risk, it is important to define marketing competences in a broader way, to be self-critical and to be proactive.